Jaguar Land Rover owner Tata has chosen the UK over Spain to build a multi-million-pound electric battery factory.

The gigafactory will support JLR’s plans to become an electric-first, modern luxury carmaker by 2030

It’s one of the largest-ever investments in the UK auto industry and seen as the most important move for the sector since Nissan arrived in the 1980s.

The plant – which will be one of the largest in Europe – will start supplies from 2026 with an annual capacity of 40GW of cells annually. That’s almost half of the battery production needed by 2030 for the UK’s phase out of petrol and diesel cars/vans. It will produce batteries for JLR brands including Range Rover, Defender, Discovery and Jaguar, as well as other manufacturers in the UK and Europe.

The project will also create some 4,000 direct jobs, as well as thousands of further jobs in the wider supply chain for battery materials and critical raw minerals.

It’s a monumental deal for the UK, which currently only has a gigafactory next to Nissan’s Sunderland plant that will expand in 2025. Britishvolt was working to develop a site in Northumberland but fell into administration in January and new owner Recharge is reportedly struggling with its work to revive the plans.

Prime Minister Rishi Sunak said: “Tata group’s decision to build their new gigafactory here in the UK – their first outside of India – is a huge vote of confidence in Britain. This will be one of the largest-ever investments in the UK automotive sector. It will not only create thousands of skilled jobs for Britons around the country, but it will also strengthen our lead in the global transition to electric vehicles, helping to grow our economy in clean industries of the future.”

Tata’s deal follows months of talks with the UK and Spanish governments – the UK is believed to have offered subsidies worth hundreds of millions of pounds to help clinch the deal, including cash grants, energy subsidies and other training and research funding. The Government has said that details of the support will be published in due course.

Tata said the gigafactory was an integral part of its commitment to electric mobility and renewable energy storage solutions, and establishes a competitive green tech ecosystem in the UK at scale. Earlier this year, JLR announced plans to invest £15bn over five years in its factories, vehicles and technology as it aims to become an electric-first, modern luxury carmaker by 2030.

N Chandrasekaran, chairman at Tata Sons, said: “Our multi-billion-pound investment will bring state-of-the-art technology to the country, helping to power the automotive sector’s transition to electric mobility, anchored by our own business, Jaguar Land Rover. With this strategic investment, the Tata group further strengthens its commitment to the UK, alongside our many companies operating here across technology, consumer, hospitality, steel, chemicals, and automotive. I also want to thank His Majesty’s Government, which has worked so closely with us to enable this investment.”

One piece of the gigafactory puzzle

The deal marks a major milestone for the UK auto industry amid fast-growing concerns that the sector is lagging far behind in the buildout of lithium-ion batteries for electric vehicles and for energy, due to a lack of government support amid a ‘global battery arms race’.

But with some 35 electric battery plants in the EU either open, under construction or planned, and post-Brexit parts sourcing rules for EVs to avoid export tariffs also posing a threat to UK electric car production, many in the sector have emphasised the need that this is just ‘one piece of the puzzle’.

Mike Hawes, SMMT chief executive, said: “This is a shot in the arm for the UK automotive industry, our economy and British manufacturing jobs, demonstrating the country is open for business and electric vehicle production. It comes at a critical moment, with the global industry transitioning at pace to electrification, producing batteries in the UK is essential if we are to anchor wider vehicle production here for the long term. We must now build on this announcement by promoting the UK’s strengths overseas, ensuring we stay competitive amid fierce global pressures and do more to scale up our EV supply chain.”

Dr Andy Palmer, founder/CEO, Palmer Automotive and current interim CEO at Pod Point, also “aired caution” while welcoming the plans.

“If UK dishes out the bulk of its battery-related support to one brand, then we still face likely car industry Armageddon. Support must come in all shapes and sizes for businesses of all shapes and sizes. One gigafactory doesn’t equal success, it equals part of the puzzle. We need a harmonious, collaborative, strategic industrial strategy that lifts all boats. Or the tide will sweep the UK automotive sector into the deep abyss.”

And FairCharge – the national campaign to make the switch to EVs accessible and affordable for all drivers – warned of the need to scale up support for other areas in the EV supply chain.

Campaign founder Quentin Willson commented: “While this is a very significant development for UK battery manufacturing, I truly hope that other companies in the battery, critical minerals, charging and EV supply chains won’t be neglected. The Government should see this subsidy as the beginning of building a battery ecosystem in this country. There is a genuine fear in the industry that it could sweep up all available government support, which would be hugely detrimental to the future health of UK plc in the race to zero. We have some world-class battery and EV talent and we must support them as much as we can to prevent this valuable resource of innovators moving to other more receptive markets.”

Reports earlier this year indicated that Tesla could be eyeing up a gigafactory in the UK. Speaking at a Wall Street Journal CEO Council event in London in May, CEO Elon Musk told the audience: “I will strongly consider England for a future location of a gigafactory.”

Musk added that Tesla is “not currently looking at new locations” for a new factory, but said the company “will probably towards the end of this year”.